More With Profits Bonus Rates On The Slide!

As we predicted in a news story earlier this week, the general reduction of With Profits bonus rates by companies has commenced.  This time it's the turn of Scottish Widows and some policies will have their bonus rates cut by a massive 33%.  If you have a regular savings scheme with Scottish Widows, these have been hit the hardest with unitised bonus rates dropping from 4.5% to 3%.  Other investments, such as pensions, with profit bonds and international with profit bonds have had unitised bonus rates cut from 5% to 4%.  However, there is some good news.  Since July 2001, Scottish Widows have been applying what is known as a Market Value Reduction.  This is effectively a penalty for people taking their money out of the unitised with profit fund.  At one point, this penalty was up to 12% of your fund value.  However, the penalty has now been reduced to 6% for units purchased before the year 2000.  For more information on with profits contracts please visit the with profits section in Life Cover Adviser .com  or contact us.